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TRADING THE PLAN

they meet the minimal conditions for a trade. You may only have to put in an hour or two a day in front of the monitor. If you’re a position trader making decisions based on monthly, weekly, and daily data, you should only have to spend 30 minutes or so each evening scanning the data and charts for potential setups, or a bit more time if you are a stock/ETF trader and following a lot of markets. Whatever time frame you trade, the routine is the same. The day begins with a list of markets that are at or near the initial trade conditions. Once the initial conditions are met, entry orders are placed. If a trade is executed and you’re not stopped out at the initial stop, the trade is monitored according to your trade plan and stop-loss decisions are made as the trade progresses. The routine is the same regardless of whether you are day-trading off 15- and 5-minute bars or position-trading off weekly and daily bars. A very important key routine, even if you are a day trader, is to do most of your analysis and preliminary decision making outside of market hours. There are few decisions that a swing or position trader makes on a daily basis for any one market because there is not that much new information each day for trades lasting a few days to a few weeks. But even day traders should start the day with a plan by identifying which markets have the best potential for trade setups that day. Every consistently successful trader keeps records of all trades with at least brief notes of why the trade was considered, how it was executed, and the trade management plan. The record keeping may be as brief or as detailed as suits you, but you must track your trade activities. The monthly brokerage statement of trades is not enough. This statement only lists trades but doesn’t provide any information about why and how you got in and out. I used to keep a very detailed journal with a form I made up in Excel to list all the details of the market conditions for considering the trade, the entry strategy, and how the trade was managed, including notes on every stop-loss adjustment. Each form included a copy of the chart when the trade was entered and at least one additional chart with data through the trade exit. This journal has evolved to a simpler format, partly because my trade plan and the information I need to make a trading decision has become much simpler over the years. My trade plan has evolved from very detailed and complex Gann, Elliott, chart geometry, time, and price strategies to much more simple strategies as outlined in this book. Today, I make notes right on the chart and print a copy when a trade is made. I may make additional handwritten notes right on the chart printout. If I’m not stopped out at the initial protective stop, I may make another one or two chart prints as the trade progresses, to note significant decision-making periods. I put the charts with notes in a three-ring binder and have a complete log to review each trade. It is fast and easy to record trades this way. Fast and easy means it will get done, and all of the relevant information is recorded. Detailed and complex means it probably won’t get done on a regular basis. I strongly suggest you develop a trade recording process that suits your temperament. By that I mean one that you will do in a timely manner on a consistent basis that includes all the relevant information needed to review the trade at a later date.

Profile for ERIC  Hunt

(wiley trading) robert c miner high probability trading strategies entry to exit tactics for the for  

(wiley trading) robert c miner high probability trading strategies entry to exit tactics for the for  

Profile for erichunt
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